Johannesburg - South Africa's rand strengthened against the dollar on Thursday in a broad rally by emerging assets after the US central bank left interest rates unchanged on Wednesday.
Stocks ended lower with SABMiller slipping after the brewer paused the integration of its businesses with those of its acquirer AB InBev.
By 16h00 GMT, the rand had gained 0.5 percent to 14.1875 per dollar, shaking off lukewarm unemployment data to resume a forward run that traders bet could push the unit to its firmest since early December.
South Africa's jobless rate inched lower in the second quarter to 26.6 percent on quarterly basis, but rose sharply year-on-year with over 400 000 more people unemployed.
High yield assets and commodities, considered a hedge against a low-return environment in developed markets, shone in the session. The rand also benefited from moderating inflation and still high lending interest rates locally.
“The global hunt for yield is definitely supportive of the rand,” said markets analyst at ETM Analytics Michael Potgieter.
“We've got a fundamental rebalancing taking place in South Africa, where we're likely to see the trade account swinging further into positive territory, while interest rates are shifting higher and inflation is not rising that much.”
The revenue service publishes June trade data on Friday. In May, the country saw a surprise $1 billion rand surplus.
Government bonds also firmed, with the yield for the benchmark instrument due in 2026 down 1 basis points to 8.735 percent.
On the bourse, stocks snapped a four-day winning run. The blue-chip JSE Top-40 index ended 1 percent lower at 46,390 and the broader All-share index was down 0.9 percent at 53,282.
SABMiller has told employees to pause the integration of its operations with those of Anheuser-Busch InBev as the brewer's board weighs its sweetened takeover offer, two sources familiar with the matter said.
Shares in the company, which is also listed in London, dropped 2 percent to R799.50.
“I suppose the execution risk as the deal drags on, heightens,” said Vestact's fund manager Sasha Naryshkine. “In fairness to all pound investors, their dollar amounts have diminished, they have a point.”
Trading volumes were a touch below average with more than 284 million shares changing hands compared with last year's daily average of 296 million shares.
REUTERS